BizJets and Poker. When To Hold. When To Fold.

April 21, 2017

Country and western performer Kenny Rogers may have been singing about a card game, but his words are most applicable to business aircraft ownership. Unlike Poker, where rules of play exist, there is no universally accepted, cut-and-dried formula for determining when to keep (and perhaps upgrade) or dispose of business aviation assets.

Complicating factors include the multiple points of view from different stakeholders regarding retain or resell decisions. External factors, such as IRS rules and generally-accepted accounting principals, play large roles. Bankers, finance companies or lessors may also hold some sway over deliberations. Regulators and their mandates definitely have a major impact. However, all of these influencers take a back seat to one overwhelming force – the Marketplace.

Buyers and sellers alike quickly learn there is a difference between worth and value. But regardless of how much or how little owners or executives appreciate the time saved and productivity increased, in the end this has little affect on how much an aircraft is worth. That is the role of the Marketplace.

Business aircraft pricing is never static because directional movement is unequivocally tied to the economy. While there is little anyone can do to counteract market forces, you can, and should, prepare for the future. Failure to do so will almost always ensure a negative financial outcome. The optimum time to begin determining what to do with your current aircraft, new or pre-owned, is the day after delivery!

Ideally, business aircraft owners would continually stay abreast of the market. They should monitor the transaction levels, current average asking prices, trends and directions, and evaluate their aircraft against those for sale. All this is to be done with a watchful eye on the economy, governmental actions, and regulatory mandates, both current and pending. But do they truly have that time, knowledge and expertise?

The obvious answer is, of course, no. The obvious solution therefore is to call upon a knowledgeable brokerage and acquisition expert who does have the time, experience and expertise. Do that, and you will always have a winning hand